EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into by
and between Input/Output, Inc., a Delaware corporation (hereinafter referred to
as "Employer"), and J. Michael Kirksey, an individual currently resident in
Harris County, Texas (hereinafter referred to as "Employee"), effective as of
January 1,2004 (the "Effective Date").
WITNESSETH:
WHEREAS, attendant to Employee's employment by Employer, Employer and
Employee wish for there to be a complete understanding and agreement between
Employer and Employee with respect to, among other terms, Employee's duties and
responsibilities to Employer; the compensation and benefits owed to Employee;
the fiduciary duties owed by Employee to Employer; Employee's obligation to
avoid conflicts of interest, disclose pertinent information to Employer, and
refrain from using or disclosing Employer's information;
WHEREAS, Employer considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing its best
interests and the best interests of its stockholders;
WHEREAS, the Board of Directors of Employer (the "Board") has determined
that appropriate steps should be taken to encourage the continued attention and
dedication of members of Employer's management; and
WHEREAS, Employer and Employee wish to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Employer and Employee agree as follows:
Section 1. General Duties of Employer and Employee.
(a) Employer agrees to employ Employee and Employee agrees to accept
employment by Employer and to serve Employer in an executive capacity as its
Executive Vice President and Chief Financial Officer. Employee will report to
the Chief Executive Officer of Employer. The powers, duties and responsibilities
of Employee as Executive Vice President and Chief Financial Officer include
those duties that are the usual and customary powers, duties and
responsibilities of such office, including those powers, duties and
responsibilities specified in Employer's Bylaws, and such other and further
duties appropriate to such position as may from time to time be assigned to
Employee by the Chief Executive Officer of Employer or the Board.
(b) While employed hereunder, Employee will devote substantially all
reasonable and necessary time, efforts, skills and attention for the benefit of
and with
-1-
Employee's primary attention to the affairs of Employer in order that he or she
may faithfully perform his or her duties and obligations. The preceding sentence
will not, however, be deemed to restrict Employee from attending to matters or
engaging in activities not directly related to the business of Employer,
provided that (i) such activities or matters are reasonable in scope and time
commitment and not otherwise in violation of this Agreement, and (ii) Employee
will not become a director or officer of (or hold any substantially similar
responsibility with) any corporation or other entity (excluding charitable or
other non-profit organizations) without prior written disclosure to, and consent
of, Employer.
(c) At the commencement of Employee's employment by Employer, Employee
will be based at Employer's corporate headquarters located at 12300 Parc Crest
Drive, Stafford, Texas 77008 (the "Place of Employment").
(d) Employee agrees and acknowledges that as an officer and employee
of Employer, and consistent with the terms hereof, he or she owes a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of Employer and to do no act knowingly which would injure Employer's
business, its interests or its reputation.
Section 2. Compensation and Benefits.
(a) Employer will pay to Employee during the term of this Agreement a
base salary at the rate of $227,000 per annum (such base salary as increased by
the Compensation Committee of the Board as hereinafter provided is referred to
herein as the "Base Salary"). The Compensation Committee of the Board will
review the Base Salary from time to time and, during the term of this Agreement,
may increase, but may not decrease, the Base Salary. The Base Salary will be
paid to Employee in equal installments every two weeks or on such other schedule
as Employer may establish from time to time for its management personnel.
(b) Employee will be eligible to participate in Employer's Incentive
Compensation Plan for the fiscal year 2004 with a target of 50% and a maximum of
75% of Employee's Base Salary. During each subsequent fiscal year during the
term of this Agreement, Employee will be eligible, in the Board's sole
discretion, to participate in that year's Incentive Compensation Plan or other
replacement incentive or bonus plan Employer establishes for its key executives.
(c) Employee will be eligible for option grants to purchase shares of
Employer's common stock, $.01 par value ("Common Stock"), or other equity
securities of Employer as provided under Employer's 2000 Long-Term Incentive
Plan (or other stock option plan or plans Employer establishes for its key
executives); such grants to be made in the sole discretion of the Board or a
duly authorized committee of the Board.
(d) Employee will be eligible to participate in Employer's Deferred
Compensation Plan (or any replacement deferred compensation plan Employer
establishes for its
-2-
key executives).
(e) Effective on the date hereof, without any requirement to accrue,
Employee will be entitled to paid vacation of not less than three (3) weeks each
year. Vacation may be taken by Employee at the time and for such periods as may
be mutually agreed upon between Employer and Employee.
(f) Employee will be reimbursed in accordance with Employer's normal
expense reimbursement policy for all of the actual and reasonable costs and
expenses incurred by him or her in the performance of his or her services and
duties hereunder, including, but not limited to, travel and entertainment
expenses. Employee will furnish Employer with all invoices and vouchers
reflecting amounts for which Employee seeks Employer's reimbursement.
(g) Employee will be entitled to participate in all insurance and
retirement plans, incentive compensation plans (at a level appropriate to his or
her position) and such other benefit plans or programs as may be in effect from
time to time for the key management employees of Employer including, without
limitation, those related to savings and thrift, retirement welfare, medical,
dental, disability, salary continuance, accidental death, travel accident life
insurance, incentive bonus, membership in business and professional
organizations, and reimbursement of business and entertainment expenses.
Specifically, Employee will be entitled to participate in the Input/Output Inc.
Deferred Compensation Plan as long as it is made available to other key
management employees.
(h) Employer, during the term of this Agreement and thereafter without
limit of time, will indemnify Employee for claims and expenses to the extent
provided in Employer's Certificate of Incorporation and Bylaws. Employer will
also provide Employee coverage under Employer's policy or policies of directors'
and officers' liability insurance to the same extent as other executive
officers of Employer during the term of this Agreement and thereafter.
(i) All Base Salary, bonus and other payments made by Employer to
Employee pursuant to this Agreement will be subject to such payroll and
withholding deductions as may be required by law and other deductions applied
generally to employees of Employer for insurance and other employee benefit
plans in which Employee participates.
Section 3. Fiduciary Duty; Confidentiality.
(a) In keeping with Employee's fiduciary duties to Employer, Employee
agrees that he or she will not knowingly take any action that would create a
conflict of interest with Employer, or upon discovery thereof, allow such a
conflict to continue. In the event that Employee discovers that such a conflict
exists, Employee agrees that he or she will disclose to the Board any facts
which might involve a conflict of interest that has not been approved by the
Board.
-3-
(b) As part of Employee's fiduciary duties to Employer, Employee
agrees to protect and safeguard Employer's information, ideas, concepts,
improvements, discoveries, and inventions and any other proprietary or
confidential information relating to Employer or its business (collectively,
"Confidential Information") and, except as may be required by Employer, Employee
will not knowingly, either during his or her employment by Employer or
thereafter, directly or indirectly, use for his or her own benefit or for the
benefit of another, or disclose to another, any Confidential Information, except
(i) with the prior written consent of Employer; (ii) in the course of the proper
performance of Employee's duties under this Agreement; (iii) for information
that becomes generally available to the public other than as a result of the
unauthorized disclosure by Employee; (iv) for information that becomes available
to Employee on a nonconfidential basis from a source other than Employer or its
affiliated companies who is not bound by a duty of confidentiality to Employer;
or (v) as may be required by any applicable law, rule, regulation or order.
(c) Upon termination of his or her employment with Employer, Employee
will immediately deliver to Employer all documents in Employee's possession or
under his or her control which embody any of Employer's Confidential
Information.
(d) In addition to the foregoing provisions of this Section 3, and
effective as of the Effective Date, Employee reaffirms the duties imposed upon
Employee by that certain Employee Proprietary Information Agreement dated as of
January 1, 2004 by and between Employer and Employee.
(e) Employee will comply with Employer's Code of Ethics issued on
February 4,2003, and any amendments or replacement policies adopted by the Board
(the "Code of Ethics").
Section 4. Term of Agreement: At-Will Employment.
The term of this Agreement will commence effective as of the Effective Date,
and, subject to the terms and conditions hereof will continue for a two-year
period ending on December 31, 2005, and thereafter, the term will be
automatically extended for successive periods of one year unless prior to the
end of the original two-year period (or, if applicable, any such one-year
period), Employer gives Employee at least ninety (90) days prior written notice
that Employer has decided not to extend the term of this Agreement.
Notwithstanding any provision contained herein to the contrary, Employee
acknowledges that his or her employment with Employer is at will and that
Employer may terminate his or her employment at any time and for any reason or
for no reason at the discretion of Employer, but subject to any rights Employee
has under Sections 5, 6 and 8 of this Agreement.
Section 5. Termination.
(a) Employee's employment with Employer hereunder will terminate upon
-4-
the first to occur of the following:
(1) The death or "Disability" (as defined in Section 5(b) hereof)
of Employee;
(2) Employer terminates such employment for "Cause" (as defined
in Section 5(c) hereof);
(3) Employee terminates such employment for "Good Reason" (as
defined in Section 5(d) hereof);
(4) Employer terminates such employment for any reason other than
Cause, or for no reason at all;
(5) Employee terminates such employment for any reason other than
Good Reason, or for no reason at all; or
(6) Employee's sixty-fifth (65th) birthday, at which time
Employee will continue to be employed by Employer as an employee at
will.
(b) As used in this Agreement, "Disability" means permanent and total
disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended (the "Code"), or any successor provision) which has existed
for at least 180 consecutive days.
(c) As used in this Agreement, "Cause" means:
(1) the willful and continued failure by Employee to
substantially perform his or her obligations under this Agreement
(other than any such failure resulting from his or her Disability)
after a written demand for substantial performance has been delivered
to him or her by the Board which specifically identifies the manner in
which the Board believes Employee has not substantially performed such
provisions and Employee has failed to remedy the situation within ten
(10) days after such demand or a willful and material violation of the
Employer's Code of Ethics;
(2) Employee's willfully engaging in conduct materially and
demonstrably injurious to the property or business of Employer,
including without limitation, fraud, misappropriation of funds or
other property of Employer, gross negligence that is materially
injurious to the property or business of Employer, or conviction of a
felony or any crime of moral turpitude; or
(3) Employee's material breach of this Agreement which breach has
not been remedied by Employee within ten (10) days after receipt by
Employee of
-5-
written notice from Employer that he or she is in material breach of
the Agreement, specifying the particulars of such breach.
For purposes of this Agreement, no act, or failure to act, on the part of
Employee shall be deemed "willful" or engaged in "willfully" if it was due
primarily to an error in judgment or negligence, but shall be deemed "willful"
or engaged in "willfully" only if done, or omitted to be done, by Employee not
in good faith and without reasonable belief that his action or omission was in
the best interest of Employer. Notwithstanding the foregoing, Employee shall not
be deemed to have been terminated as a result of "Cause" hereunder unless and
until there shall have been delivered to Employee a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the Board
then in office at a meeting of the Board called and held for such purpose (after
reasonable notice to Employee and an opportunity for Employee, together with his
or her counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board of Directors, Employee has committed an act set forth above
in this Section 5(e) and specifying the particulars thereof in detail. Nothing
herein shall limit the right of Employee or his or her legal representatives to
contest the validity or propriety of any such determination.
(d) As used in this Agreement, "Good Reason" means:
(1) Employer's failure to comply with any of the provisions of
Section 2 of this Agreement (including, but not limited to, such a
failure resulting from any reduction in the Base Salary) which failure
is not remedied within ten (10) days after receipt of written notice
from Employee specifying the particulars of such breach;
(2) Employer's breach of any other material provision of this
Agreement which is not remedied within ten (10) days after receipt by
Employer of written notice from Employee specifying the particulars of
such breach;
(3) the assignment to Employee of any duties materially
inconsistent with Employee's position, duties, functions,
responsibilities or authority as contemplated by Section 1 of this
Agreement; or
(4) the relocation of Employee's principal place of performance
of his or her duties and responsibilities under this Agreement to a
location more than fifty miles (50) miles from the Place of
Employment;
(5) Any failure by Employer to comply with Section 11(c); or
(6) Any purported termination of Employee's employment by
Employer which is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 5(e) hereof (and for purposes
of this Agreement, no such purported termination shall be effective).
-6-
(e) Any termination by Employer or Employee of Employee's employment
with Employer (other than any such termination occurring on Employee's
sixty-fifth (65th) birthday) shall be communicated by written notice (a "Notice
of Termination") to the other party that shall:
(1) indicate the specific provision of this Agreement relied upon
for such termination;
(2) indicate the specific provision of this Agreement pursuant to
which Employee is to receive compensation and other benefits as a
result of such termination; and
(3) otherwise comply with the provisions of this Section 5(e) and
Section 13(a).
If a Notice of Termination states that Employee's employment with Employer has
been terminated as a result of Employee's Disability, the notice shall (i)
specifically describe the basis for the determination of Employee's Disability,
and (ii) state the date of the determination of Employee's Disability, which
date shall be not more than ten (10) days before the date such notice is given.
If the notice is from Employer and states that Employee's employment with
Employer is terminated by Employer as a result of the occurrence of Cause, the
Notice of Termination shall specifically describe the action or inaction of
Employee that Employer believes constitutes Cause and shall be accompanied by a
copy of the resolution satisfying Section 5(c). If the Notice of Termination is
from Employee and states that Employee's employment with Employer is terminated
by Employee as a result of the occurrence of Good Reason, the Notice of
Termination shall specifically describe the action or inaction of Employer that
Employee believes constitutes Good Reason. Any purported termination by Employer
of Employee's employment with Employer shall be ineffective unless such
termination shall have been communicated by Employer to Employee by a Notice of
Termination that meets the requirements of this Section 5(e) and the provisions
of Section 13(a).
(f) As used in this Agreement, "Date of Termination" means:
(1) if Employee's employment with Employer is terminated for
Disability, sixty (60) days after Notice of Termination is received by
Employee or any later date specified therein, provided that within
such sixty (60) day period Employee shall not have returned to
full-time performance of Employee's duties;
(2) if Employee's employment with Employer is terminated as a
result of Employee's death, the date of death of Employee;
(3) if Employee's employment with Employer is terminated for
Cause, the date Notice of Termination, accompanied by a copy of the
resolution
-7-
satisfying Section 5(c), is received by Employee or any later date
specified therein, provided that Employer may, in its discretion,
condition Employee's continued employment upon such considerations or
requirements as may be reasonable under the circumstances and place a
reasonable limitation upon the time within which Employee will comply
with such considerations or requirements;
(4) if Employee's employment with Employer is terminated upon the
occurrence of Employee's sixty-fifth (65th) birthday, the date of such
birthday, at which time Employee will continue to be employed by
Employer as an employee at will; or
(5) if Employee's employment with Employer is terminated for any
reason other than Employee's Disability, Employee's death, Cause or
the occurrence of Employee's sixty-fifth (65th) birthday, or for no
reason, the date that is fourteen (14) days after the date of receipt
of the Notice of Termination.
Section 6. Effect of Termination of Employment.
(a) Upon termination of Employee's employment by Employer for Cause,
or by Employee for no reason or any reason other than Good Reason, all
compensation and benefits will cease upon the Date of Termination other than:
(i) those benefits that are provided by retirement and benefit plans and
programs specifically adopted and approved by Employer for Employee that are
earned and vested by the Date of Termination, (ii) as provided in Section 10,
(iii) Employee's Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
benefits the continuation of which is required by applicable law or provided by
the applicable benefit plan.
(b) Upon termination of Employee's employment due to the death of
Employee or upon termination by Employer due to the Disability of Employee, all
compensation and benefits will cease upon the Date of Termination other than:
(i) those benefits that are provided by retirement and benefit plans and
programs specifically adopted and approved by Employer for Employee that are
earned and vested by the Date of Termination, (ii) as provided in Section 10,
(iii) Employee's Base Salary through the Date of Termination; (iv) any incentive
compensation due Employee if, under the terms of the relevant incentive
compensation arrangement, such incentive compensation was due and payable to
Employee on or before the Date of Termination; and (v) medical and similar
benefits the continuation of which is required by applicable law or provided by
the applicable benefit plan.
(c) Upon termination of this Agreement due to Employee's reaching his
or her sixty-fifth (65th) birthday, Employee will continue to be employed by
Employer as an
-8-
employee at will.
(d) If Employee's employment with Employer is terminated (i) by
Employer for no reason or for any reason other than Cause, the death or
Disability of Employee, or Employee's reaching his or her sixty-fifth (65th)
birthday, or (ii) by Employee for Good Reason, the obligations of Employer and
Employee under Sections 1 and 2 will terminate as of the Date of Termination,
and Employer will pay or provide to Employee the following:
(1) Employee's Base Salary through the Date of Termination;
(2) incentive compensation due Employee, if any, under the terms
of the relevant incentive compensation arrangement, which, in the
absence of any agreement to the contrary, shall be the pro rata amount
due to Employee based on payments that would be due if Employee had
remained employed by Employer for the full fiscal year;
(3) during the twelve-month period following the Date of
Termination, Employer shall pay to Employee an aggregate amount (the
"Severance Payment") equal to (i) one time (1.0x) Employee's Base
Salary at the highest annual rate in effect on or before the Date of
Termination (but prior to giving effect to any reduction therein which
precipitated such termination) plus (ii) Employee's bonus payment, if
any, made in the fiscal year prior to the year in which the Date of
Termination occurs, which Severance Payment will be paid to Employee
in twelve (12) equal monthly installments during such one-year period;
and
(4) if immediately prior to the Date of Termination, Employee
(and, if applicable, his or her spouse and/or dependents) was covered
under Employer's group medical, dental, health and hospital plan in
effect at such time, then Employer shall provide to Employee for
twelve (12) months after the Date of Termination, and provided that
Employee has timely elected under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), to continue coverage
under such plan, Employer will, at no greater cost or expense to
Employee than was the case immediately prior to the Date of
Termination, maintain such continued coverage in full force and
effect.
Except as otherwise provided above and in Sections 7 and 10, all other
compensation and benefits will cease upon the Date of Termination other than the
following: (i) those benefits that are provided by retirement and benefit plans
and programs specifically adopted and approved by Employer for Employee that are
earned and vested by the Date of Termination, (ii) any rights Employee or his
survivors may have under any grants of options to purchase Employer's Common
Stock, restricted stock grants, performance share grants, or other similar
equity compensation plans; and (iii) medical and similar benefits the
continuation of which is required by applicable law or as provided by the
applicable benefit plan. As a condition to making the
-9-
payments and providing the benefits specified in this Section 6(d), Employer
will require that Employee execute a release of all claims Employee may have
against Employer at the time of Employee's termination. Such release will be in
substantially the same form as Exhibit A attached hereto.
(e) If (i) a "Change in Control" (as defined in Section 6(f) hereof)
shall have occurred, the following shall occur immediately upon the occurrence
of such Change in Control:
(1) each option to acquire Common Stock or other equity
securities of Employer held by Employee immediately prior to such
Change in Control issued to Employee in conjunction with or after
Employee accepted employment with Employer shall accelerate and become
fully vested and exercisable, regardless of whether or not the vesting
conditions set forth in the relevant stock option agreement have been
satisfied, and shall remain fully exercisable for a one-year period
following the Date of Termination consistent with Section 5(e) hereof;
and
(2) all restrictions on any restricted Common Stock or other
equity securities of Employer granted to Employee prior to such Change
in Control shall be removed and such Common Stock or other equity
securities shall be freely transferable (subject to applicable
securities laws), regardless of whether the conditions set forth in
the relevant restricted stock agreements have been satisfied in full.
(f) For purposes of this Agreement, a "Change in Control" shall mean
the occurrence of any of the following after the Effective Date:
(1) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended from time to time (the "Exchange Act"), or any
successor statute) (a "Covered Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 40% or more of either (i) the then outstanding shares of Common
Stock (the "Outstanding Company Common Stock"), or (ii) the combined
voting power of the then outstanding voting securities of Employer
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this Section 6(f)(1), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition directly from
Employer or any subsidiary of Employer, (ii) any acquisition by
Employer or any subsidiary of Employer, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
Employer or any entity controlled by Employer, or (iv) any acquisition
by any corporation pursuant to a reorganization, merger, consolidation
or similar business combination involving Employer (a "Merger"), if,
following such Merger, the conditions described in Section 6(f)(3)(i)
and (ii) are satisfied; or
-10-
(2) individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Effective Date whose election,
or nomination for election by Employer's stockholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest (a solicitation by any
person or group of persons for the purpose of opposing a solicitation
of proxies or consents by the Board with respect to the election or
removal of Directors at any annual or special meetings of
stockholders) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Covered Person other than the Board; or
(3) Approval by the stockholders of Employer of a Merger, unless
immediately following such Merger, (i) substantially all of the
holders of the Outstanding Company Voting Securities immediately prior
to the Merger beneficially own, directly or indirectly, more than 50%
of the common stock of the corporation resulting from such Merger (or
its parent corporation) in substantially the same proportion as their
ownership of Outstanding Company Voting Securities immediately prior
to such Merger and (ii) at least a majority of the members of the
hoard of directors of the corporation resulting from such Merger (or
its parent corporation) were members of the Incumbent Board at the
time of the execution of the initial agreement providing for such
Merger; or
(4) the sale or other disposition of all or substantially all of
the assets of Employer.
Section 7. Excise Tax.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by, or benefit
from, Employer or any of its affiliates to or for the benefit of Employee,
whether paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (any such payments, distributions or benefits being
individually referred to herein as a "Payment," and any two or more of such
payments, distributions or benefits being referred to herein as "Payments"),
would be subject to the excise tax imposed by Section 4999 of the Code (such
excise tax, together with any interest thereon, any penalties, additions to tax,
or additional amounts with respect to such excise tax, and any interest in
respect of such penalties, additions to tax or additional amounts, being
collectively referred herein to as the "Excise Tax"), then Employee shall be
entitled to receive an additional payment or payments (individually referred to
herein as a "Gross-Up Payment" and any two or more of such additional payments
being referred to herein as "Gross-Up Payments") in an amount such that after
payment by Employee of all taxes (as defined in Section 7(i))
-11-
imposed upon the Gross-Up Payment, Employee retains an amount of such Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 7(c) through (i), any
determination (individually, a "Determination") required to be made under this
Section 7(b), including whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall initially be made, at Employer's expense, by
nationally recognized tax counsel selected by Employer ("Tax Counsel"). Tax
Counsel shall provide detailed supporting legal authorities, calculations, and
documentation both to Employer and Employee within 15 business days of the
termination of Employee's employment, if applicable, or such other time or times
as is reasonably requested by Employer or Employee. If Tax Counsel makes the
initial Determination that no Excise Tax is payable by Employee with respect to
a Payment or Payments, it shall furnish Employee with an opinion reasonably
acceptable to Employee that no Excise Tax will be imposed with respect to any
such Payment or Payments. Employee shall have the right to dispute any
Determination (a "Dispute"). The Gross-Up Payment, if any, as determined
pursuant to such Determination shall, at Employer's expense, be paid by Employer
to or for the benefit of Employee within five business days of Employee's
receipt of such Determination. The existence of a Dispute shall not in any way
affect Employee's right to receive the Gross-Up Payment in accordance with such
Determination. If there is no Dispute, such Determination shall be binding,
final and conclusive upon Employer and Employee, subject in all respects,
however, to the provisions of Section 7(c) through (i) below. As a result of the
uncertainty in the application of Sections 4999 and 280G of the Code, it is
possible that Gross-Up Payments (or portions thereof) which will not have been
made by Employer should have been made ("Underpayment"), and if upon any
reasonable written request from Employee or Employer to Tax Counsel, or upon Tax
Counsel's own initiative, Tax Counsel, at Employer's expense, thereafter
determines that Employee is required to make a payment of any Excise Tax or any
additional Excise Tax, as the case may be, Tax Counsel shall, at Employer's
expense, determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Employer to or for the benefit of
Employee.
(c) Employer shall defend, hold harmless, and indemnify Employee on a
fully grossed-up after tax basis from and against any and all claims, losses,
liabilities, obligations, damages, impositions, assessments, demands, judgments,
settlements, costs and expenses (including reasonable attorneys', accountants',
and experts' fees and expenses) with respect to any tax liability of Employee
resulting from any Final Determination (as defined in Section 7(h)) that any
Payment is subject to the Excise Tax.
(d) If a party hereto receives any written or oral communication with
respect to any question, adjustment, assessment or pending or threatened audit
examination, investigation or administrative, court or other proceeding which,
if pursued successfully, could result in or give rise to a claim by Employee
against Employer under this Section 7 ("Claim"), including, but not limited to,
a claim for indemnification of Employee by Employer under
-12-
Section 7(c), then such party shall promptly notify the other party hereto in
writing of such Claim ("Tax Claim Notice").
(e) If a Claim is asserted against Employee ("Employee Claim"),
Employee shall take or cause to be taken such action in connection with
contesting such Employee Claim as Employer shall reasonably request in writing
from time to time, including the retention of counsel and experts as are
reasonably designated by Employer (it being understood and agreed by the parties
hereto that the terms of any such retention shall expressly provide that
Employer shall be solely responsible for the payment of any and all fees and
disbursements of such counsel and any experts) and the execution of powers of
attorney.
(f) Employer shall have the right to defend or prosecute, at the sole
cost, expense and risk of Employer, such Employee Claim by all appropriate
proceedings, which proceedings shall be defended or prosecuted diligently by
Employer to a Final Determination; provided, however, that (i) Employer shall
not, without Employee's prior written consent, enter into any compromise or
settlement of such Employee Claim that would adversely affect Employee, (ii) any
request from Employer to Employee regarding any extension of the statute of
limitations relating to assessment, payment, or collection of taxes for the
taxable year of Employee with respect to which the contested issues involved in,
and amount of, Employee Claim relate is limited solely to such contested issues
and amount, and (iii) Employer's control of any contest or proceeding shall be
limited to issues with respect to Employee Claim and Employee shall be entitled
to settle or contest, in his sole and absolute discretion, any other issue
raised by the Internal Revenue Service or any other taxing authority. So long as
Employer is diligently defending or prosecuting such Employee Claim, Employee
shall provide or cause to be provided to Employer any information reasonably
requested by Employer that relates to such Employee Claim, and shall otherwise
cooperate with Employer and its representatives in good faith in order to
contest effectively such Employee Claim. Employer shall keep Employee informed
of all developments and events relating to any such Employee Claim (including,
without limitation, providing to Employee copies of all written materials
pertaining to any such Employee Claim), and Employee or his authorized
representatives shall be entitled, at Employee's expense, to participate in all
conferences, meetings and proceedings relating to any such Employee Claim.
(g) In the case of any Employee Claim that is defended or prosecuted
to a Final Determination pursuant to the terms of this Section 7(g), Employer
shall pay, on a fully grossed-up after tax basis, to Employee in immediately
available funds the full amount of any taxes arising or resulting from or
incurred in connection with such Employee Claim that have not theretofore been
paid by Employer to Employee, together with the costs and expenses, on a fully
grossed-up after tax basis, incurred in connection therewith that have not
theretofore been paid by Employer to Employee, within ten calendar days after
such Final Determination. In the case of any Employee Claim not covered by the
preceding sentence, Employer shall pay, on a fully grossed-up after tax basis,
to Employee in immediately available funds the full amount of any taxes arising
or resulting from or incurred in connection with such Employee Claim at least
ten
-13-
calendar days before the date payment of such taxes is due from Employee, except
where payment of such taxes is sooner required under the provisions of this
Section 7(g), in which case payment of such taxes (and payment, on a fully
grossed-up after tax basis, of any costs and expenses required to be paid under
this Section 7(g)) shall be made within the time and in the manner otherwise
provided in this Section 7(g).
(h) For purposes of this Agreement, the term "Final Determination"
shall mean (A) a decision, judgment, decree or other order by a court or other
tribunal with appropriate jurisdiction, which has become final and
non-appealable; (B) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (C) any disallowance of
a claim for refund or credit in respect to an overpayment of tax unless a suit
is filed on a timely basis; or (D) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(i) For purposes of this Agreement, the terms "tax" and "taxes" mean
any and all taxes of any kind whatsoever (including, but not limited to, any and
all Excise Taxes, income taxes, and employment taxes), together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such taxes and any interest in respect of such penalties, additions
to tax, or additional amounts.
Section 8. Expenses of Enforcement.
Upon demand by Employee made to Employer, Employer shall reimburse Employee
for the reasonable expenses (including attorneys' fees and expenses) incurred by
Employee after a Change in Control in enforcing or seeking to enforce the
payment of any amount or other benefit to which Employee shall have become
entitled under this Agreement as a result of the termination of Employee's
employment with Employer within two (2) years after the Employee's Date of
Termination, including, but not limited to, those incurred in connection with
any arbitration concerning same initiated pursuant to Section 14 (regardless of
the outcome of such arbitration). To the extent that any such reimbursement
would be subject to the Excise Tax, then Employee shall be entitled to receive
Gross-Up Payments in an amount such that after payment by Employee of all taxes
imposed on such Gross-Up Payments, Employee retains an amount equal to the
Excise Tax imposed upon the reimbursement, and the other provisions of Section 7
hereof shall also apply to such circumstance unless the context thereof
otherwise indicates.
Section 9. No Obligation to Mitigate; No Rights of Offset.
(a) Employee shall not be required to mitigate the amount of any
payment or other benefit required to be paid to Employee pursuant to this
Agreement, whether by seeking other employment or otherwise, nor shall the
amount of any such payment or other benefit be reduced on account of any
compensation earned by Employee as a result of employment by
-14-
another person.
(b) Employer's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any setoff, counterclaim, recoupment, defense or other claim, right
or action which Employer may have against Employee or others.
Section 10. No Effect on Other Rights.
Nothing in this Agreement shall prevent or limit Employee's continuing or
future participation in any plan, program, policy or practice of or provided by
Employer or any of its affiliates and for which Employee may qualify, nor shall
anything herein limit or otherwise affect such rights as Employee may have under
any stock option or other agreements with Employer or any of its affiliates.
Amounts which are vested benefits or which Employee is otherwise entitled to
receive under any plan, program, policy or practice of or provided by, or any
other contract or agreement with, Employer or any of its affiliates at or
subsequent to the Date of Termination shall be payable or otherwise provided in
accordance with such plan, program, policy or practice or contract or agreement
except as explicitly modified by this Agreement.
Section 11. Successors; Binding Agreement.
(a) This Agreement is personal to Employee and without the prior
written consent of Employer shall not be assignable by Employee otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
(b) This Agreement shall inure to the benefit of and be binding upon
Employer and its successors and assigns.
(c) Employer will require any successor (whether direct or indirect,
by purchase, merger, amalgamation, consolidation or otherwise) to all or
substantially all of the business and/or assets of Employer, by agreement in
form and substance reasonably satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
Employer would be required to perform it if no such succession had taken place.
As used in this Agreement, "Employer" shall mean Employer as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by execution and delivery of the
agreement provided for in this Section 11(c) or which otherwise becomes bound by
the terms and provisions of this Agreement by operation of law or otherwise.
Section 12. Non-Competition; Non-Solicitation; No Hire.
-15-
(a) Employee agrees that, effective as of the Effective Date and for a
period of twelve (12) months after the Date of Termination (such applicable
period being referred to herein as the "Non-Compete Period"), Employee shall
not, without the prior written consent of Employer, directly or indirectly,
anywhere in the world, engage, invest, own any interest, or participate in,
consult with, render services to, or be employed by any business, person, firm
or entity that is in competition with the "Business" (as defined in Section
12(d)) of Employer or any of its subsidiaries or affiliates, except for the
account of Employer and its subsidiaries and affiliates; provided, however, that
during the Non-Compete Period Employee may acquire, solely as a passive
investment, not more than two percent (2%) of the outstanding shares or other
units of any security of any entity subject to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended. Employee acknowledges
that a remedy at law for any breach or attempted breach of this covenant not to
compete will be inadequate and further agrees that any breach of this covenant
not to compete will result in irreparable harm to Employer, and, accordingly,
Employer shall, in addition to any other remedy that may be available to it, be
entitled to specific performance and temporary and permanent injunctive and
other equitable relief (without proof of actual damage or inadequacy of legal
remedy) in case of any such breach or attempted breach. Employee acknowledges
that this covenant not to compete is being provided as an inducement to Employer
to enter into this Agreement and that this covenant not to compete contains
reasonable limitations as to time, geographical area and scope of activity to be
restrained that do not impose a greater restraint than is necessary to protect
the goodwill or other business interest of Employer. Whenever possible, each
provision of this covenant not to compete shall be interpreted in such a manner
as to be effective and valid under applicable law but if any provision of this
covenant not to compete shall be prohibited by or invalid under applicable law,
such provision of this covenant not to compete shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remaining provisions of this
covenant not to compete. If any provision of this covenant not to compete shall,
for any reason, be judged by any court of competent jurisdiction to be invalid
or unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this covenant not to compete but shall be confined in its operation
to the provision of this covenant not to compete directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this covenant not to compete should ever be deemed to exceed
the time or geographic limitations permitted by applicable laws, then such
provision shall be reformed to the maximum time or geographic limitations
permitted by applicable law.
(b) In addition to the restrictions set forth in Section 12(a),
Employee agrees that, during the Non-Compete Period, Employee will not, either
directly or indirectly, (i) make known to any person, firm or entity that is in
competition with the Business of Employer or any of its subsidiaries or
affiliates the names and addresses of any of the suppliers or customers of
Employer or any of its subsidiaries or affiliates, potential customers of
Employer or any of its subsidiaries or affiliates upon whom Employer or any of
its subsidiaries or affiliates has called upon in the last twelve (12), or (ii)
call on, solicit, or take away, or attempt to call on, solicit or
-16-
take away any of the suppliers or customers of Employer or any of its
subsidiaries or affiliates whether for Employee or for any other person, firm or
entity.
(c) Regardless of the reason for any termination of Employee's
employment, effective as of the Effective Date and for twelve (12) months
following the Date of Termination, Employee will not, either on his or her own
account or for any other person, firm, partnership, corporation, or other entity
(i) solicit any employee of Employer or any of its subsidiaries or affiliates to
leave such employment or (ii) induce or attempt to induce any such employee to
breach her or his employment agreement with Employer or any of its subsidiaries
or affiliates. This restriction shall not apply in the case of any employee or
former employee of Employer who at his or her own initiative seeks, without
solicitation or encouragement by Employee, a change of employment or responds to
solicitations made by means of general advertisement.
(d) As used in this Agreement, "Business" means the business of (i)
design, manufacture, marketing and sale of equipment for seismic acquisition,
(ii) seismic processing and (iii) seismic interpretation.
(e) In the event that Employee breaches or violates any of the terms
and conditions of this Section 12 during the Non-Compete Period, then in
addition to the other rights and remedies available to Employer hereunder and
under Section 14 hereof, Employer's obligations to pay to Employee any remaining
installments of the Severance Payment otherwise due and owing pursuant to
Section 6(d)(3) hereof, shall cease and terminate.
Section 13. Miscellaneous.
(a) All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith will be in writing
and will be delivered by hand or by registered or certified mail, return receipt
requested to the addresses set forth below in this Section 13(a):
If to Employer, to:
Input/Output, Inc.
12300 Parc Crest Drive
Stafford, TX 77477
Attention: General Counsel
If to Employee, to:
J. Michael Kirksey
14803 Tumbling Falls
Houston, Texas 77062
-17-
or to such other names or addresses as Employer or Employee, as the case may be,
designate by notice to the other party hereto in the manner specified in this
Section.
(b) This Agreement (including the Exhibit(s) attached hereto)
supersedes, replaces and merges all previous agreements and discussions relating
to the same or similar subject matters between Employee and Employer and
constitutes the entire agreement between Employee and Employer with respect to
the subject matter of this Agreement, except for (i) the Employee Proprietary
Information Agreement referred to in Section 3(d) hereof, and (ii) the stock
option, restricted stock award and other agreements of the nature contemplated
under Section 8 hereof, each of which shall remain in full force and effect.
This Agreement may not be modified in any respect by any verbal statement,
representation or agreement made by any employee, officer, or representative of
Employer or by any written agreement unless signed by an officer of Employer who
is expressly authorized by the Board to execute such document.
(c) If any provision of this Agreement or application thereof to any
one or under any circumstances should be determined to be invalid or
unenforceable, such invalidity or unenforceability will not affect any other
provisions or applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application. In addition, if any
provision of this Agreement is held by an arbitration panel or a court of
competent jurisdiction to be invalid, unenforceable, unreasonable, unduly
restrictive or overly broad, the parties intend that such arbitration panel or
court modify said provision so as to render it valid, enforceable, reasonable
and not unduly restrictive or overly broad.
(d) The internal laws of the State of Texas will govern the
interpretation, validity, enforcement and effect of this Agreement without
regard to the place of execution or the place for performance thereof.
(e) The covenants, agreements, rights and obligations of Employer
under this Agreement, and the covenants, agreements, rights and obligations of
Employee under this Agreement, shall survive the termination of this Agreement
for any reason including, but not limited to, the termination of Employee's
employment with Employer. All covenants, agreements, indemnities, warranties,
rights and obligations contained herein shall continue for so long as necessary
in order for Employer and Employee to enforce their rights hereunder.
Section 14. Arbitration.
(a) Employer and Employee agree to submit to final and binding
arbitration any and all disputes or disagreements concerning the interpretation
or application of this Agreement. Any such dispute or disagreement will be
resolved by arbitration in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association (the "AAA
Rules"). Arbitration will take place in Houston, Texas, unless the parties
-18-
mutually agree to a different location. Within 30 calendar days of the
initiation of arbitration hereunder, each party will designate an arbitrator.
The appointed arbitrators will then appoint a third arbitrator. Employee and
Employer agree that the decision of the arbitrators will be final and binding on
both parties. Any court having jurisdiction may enter a judgment upon the award
rendered by the arbitrators. In the event the arbitration is decided in whole or
in part in favor of Employee, Employer will reimburse Employee for his or her
reasonable costs and expenses of the arbitration (including reasonable
attorneys' fees).
(b) Notwithstanding the provisions of Section 14(a), Employer may, if
it so chooses, bring an action in any court of competent jurisdiction for
injunctive relief to enforce Employee's obligations under Sections 3(b), 3(c),
3(d), 3(e) and 12 hereof.
Section 15. Additional Agreements.
Employer and Employee shall enter into that certain Restricted Stock Award
Agreement in the form attached hereto as Exhibit B and that certain Incentive
Agreement for Nonstatutory Stock Option in the form attached hereto as Exhibit C
on Employee's first date of employment with Employer.
SIGNATURES TO FOLLOW ON NEXT PAGE
-19-
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as to be effective as of the Effective Date.
EMPLOYER:
INPUT/OUTPUT, INC.
By: ROBERT P. PEEBLER
/s/ ROBERT P. PEEBLER
---------------------
EMPLOYEE:
J. MICHAEL KIRKSEY
/s/ J. MICHAEL KIRKSEY
----------------------
-20-
EXHIBIT A - EMPLOYMENT AGREEMENT
AGREEMENT AND RELEASE OF ALL CLAIMS
This Agreement, entered into as of the date written by Employee's signature
below, is by and between Input/Output, Inc. ("Input/Output"), a Delaware
corporation, and Michael Kirksey ("Employee"). (As used in this Agreement, the
term "Input/Output" includes Input/Output, Inc., and all of its subsidiary and
affiliated companies.)
Input/Output and Employee agree as follows:
Section 1. Within 5 business days after the Separation Date, as defined in
Section 3 below, and whether or not Employee executes and returns this
Agreement, Input/Output will pay Employee the following amounts:
o Employee's regular base salary prorated through the Separation
Date;
o Employee's vacation pay accrued as of the Separation Date; and
o any expense reimbursement owed to Employee under Input/Output
policy.
All of the above amounts will be REDUCED by applicable taxes and withholding.
Section 2. During the one-year period ending on the first anniversary of
the Separation Date, Employer shall, subject in all respects to the terms of the
Employment Agreement between Employer and Employee dated _____________,2003
(herein referred to as the "Employment Agreement"), pay to Employee an aggregate
amount (the "Severance Payment") equal to (i) one times (lx) Employee's Base
Salary (as defined in the Employment Agreement at the highest annual rate in
effect on or before the Separation Date (but prior to giving effect to any
reduction therein which precipitated such termination) plus (ii) Employee's
bonus payment, if any, made in the fiscal year prior to the year in which the
Date of Termination occurs, which Severance Payment will be paid to Employee in
twelve (12) equal monthly installments during such one-year period (subject to
the terms of the Employment Agreement). All amounts so paid will be REDUCED by
applicable taxes and withholding.
[IF APPLICABLE: In addition, Employer will pay or provide for Employee's
medical, dental, health, and hospital coverage for one year, in accordance with
Section 6(d)(4) of the Employment Agreement.]
1
EXHIBIT A
EXHIBIT A - EMPLOYMENT AGREEMENT
Section 3. Employee's termination from employment will be effective at the
close of business on the Separation Date. The SEPARATION DATE as used in this
Agreement means ___________,200__.
Section 4. Employee agrees to release Input/Output from any claims he has
or may have against Input/Output as of the date he signs this Agreement. The
claims he is releasing include all of the following:
o any claims under any bonus or incentive plans;
o any claims for tortious action or inaction of any sort ("tortious
action or inaction" means, among other things, claims for such
things as negligence, fraud, libel, or slander);
o any claims arising under the Age Discrimination in Employment Act
of 1967 as amended (29 U.S.C. Section 621, et seq.) (the Age
Discrimination in Employment Act of 1967 prohibits, in general,
discrimination against employees on the basis of age);
o any claims arising under Title VII of the Civil Rights Act of
1964 as amended (42 U.S.C. Section 2000e, et seq.), or the Texas
Commission on Human Rights Act (Texas Labor Code Section 21.001,
et seq.) (both of these statutes, in general, prohibit
discrimination in employment on the basis of race, religion,
national origin or gender);
o any claims arising under the Americans with Disabilities Act of
1990, as amended (42 U.S.C. Section 12101, et seq.) (the
Americans with Disabilities Act of 1990 prohibits, in general,
discrimination in employment on the basis of an employee's or
applicant's disability);
o any claims arising under Texas Labor Code Sections 451.001, et
seq. for retaliation or discrimination in connection with a claim
for workers' compensation benefits; and
o any claims for breach of contract, wrongful discharge,
constructive discharge, retaliation, or conspiracy.
The release contained in this Section 4 WILL NOT affect any of the
following:
2
EXHIBIT A
EXHIBIT A - EMPLOYMENT AGREEMENT
o Employee's rights or benefits under Input/Output's 401(k)
retirement savings plan, Input/Output's Employee Stock Purchase
Plan, or any pension or retirement plan in which Employee is a
participant on the Separation Date (Employee's rights and
benefits will be determined by the applicable plan documents);
o Employee's right to elect continued health and/or dental benefits
under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA");
o Employee's right to exercise any options to purchase Input/Output
common stock in accordance with the terms of the applicable stock
option grant;
o Employee's rights under any restricted stock agreement between
Employee and Input/Output under the terms of which Employee has
been granted Input/Output restricted stock;
o Employee's rights under that certain Indemnity Agreement with
Employer dated March 23, 2002;
o Any other benefit to which Employee may be entitled under any
other health or benefit plan in accordance with the applicable
plan documents; or
o Employee's rights under any workers' compensation statue; the
Jones Act 46 U.S.C. Appx. Section 688, as amended; general
maritime law or similar laws; and any other right Employee may
have with respect to bodily injury.
Section 5. Input/Output and Employee agree that this Agreement is a binding
contract. The purpose of the Agreement is to compromise doubtful or disputed
claims, avoid litigation, and buy peace. Employee agrees that although
Input/Output is making payment to Employee in exchange for a release of claims,
Input/Output does not admit any wrongdoing of any kind.
Section 6. Employee agrees to assist Input/Output in defending any legal
proceedings against Input/Output arising out of matters which occurred on or
prior to the Separation Date. Input/Output agrees to reimburse Employee for his
time and expense or costs he may incur in that regard.
Section 7. Employee confirms that after the Effective Date he remains
subject to and agrees to comply with:
3
EXHIBIT A
EXHIBIT A - EMPLOYMENT AGREEMENT
o those obligations of confidentiality contained in Section 3(b)
and 3(c) of the Employment Agreement;
o the provisions relating to competition with Employer contained in
Section 10 of the Employment Agreement;
o the provisions relating to solicitation or hiring of Employer's
employees contained in Section 10 of the Employment Agreement;
and
o the terms of the Employee Confidentiality and Intellectual
Property Agreement with Employer which Employee signed
effective____________, 200__.
Section 8. This Agreement has been delivered to Employee on _______, 200__.
o Employee will have 21 calendar days from _______ or until the
close of business on to decide whether to sign and return this
Agreement and be bound by its terms. In the event Employee has
not signed and returned this Agreement to Input/Output on or
before __________, this Agreement will become null and void.
o Input/Output and Employee agree that if they agree to change the
terms of this Agreement in any manner after it is delivered to
Employee, even if the changes are material, the 21-day period
specified in the previous paragraph will not restart or be
extended.
o After signing this Agreement, Employee will have the right to
revoke the Agreement for a period of 7 calendar days after
signing it by (a) notifying Input/Output in writing that Employee
revokes the Agreement and (b) returning to Input/Output any
consideration paid Employee under Section 2 above. In the event
Employee revokes the Agreement, it will become null and void.
Section 9. Employee acknowledges that he has read this Agreement. He
understands that, except for the exceptions set out in Section 4 above, this
Agreement will have the effect of waiving any claim he may pursue against
Input/Output.
Section 10. Employee acknowledges that he makes this Agreement knowingly
and voluntarily.
4
EXHIBIT A
EXHIBIT A - EMPLOYMENT AGREEMENT
Section 11. This Agreement constitutes the entire understanding between
Input/Output and Employee with respect to the subject matter hereof.
Section 12. This Agreement will benefit and be binding upon Input/Output
and its successors and assigns and Employee and his successors and legal
representatives. Employee will not assign or attempt to assign any of his rights
under this Agreement.
Section 13. If a court determines that any provision of this Agreement is
invalid, the other provisions will remain in effect.
Section 14. This Agreement will be governed by, construed under, and
enforced in accordance with the laws of the State of Texas, not including,
however, its conflicts of law rules that might otherwise refer to the law of
another forum or jurisdiction.
Section 15. This Agreement will become effective and enforceable only after
a period of 7 days has expired following Employee's execution and delivery of
this Agreement to Input/Output (this date is referred to in this Agreement as
the "EFFECTIVE DATE").
THIS AGREEMENT IS SUBJECT TO ARBITRATION IN
ACCORDANCE WITH THE FOLLOWING SECTION
Section 16. Employer and Employee agree to submit to final and binding
arbitration any and all disputes or disagreements concerning the interpretation
or application of this Agreement. Any such dispute or disagreement will be
resolved by arbitration in accordance with the National Rules for the Resolution
of Employment Disputes of the American Arbitration Association (the "AAA
Rules"). Arbitration will take place in Houston, Texas, unless the parties
mutually agree to a different location. Within 30 calendar days of the
initiation of arbitration hereunder, each party will designate an arbitrator.
The appointed arbitrators will then appoint a third arbitrator. Employee and
Employer agree that the decision of the arbitrators will be final and binding on
both parties. Any court having jurisdiction may enter a judgment upon the award
rendered by the arbitrators. In the event the arbitration is decided in whole or
in part in favor of Employee, Employer will reimburse Employee for his
reasonable costs and expenses of the arbitration (including reasonable
attorneys' fees).
Notwithstanding the provisions of the previous paragraph, Employer may, if
it so chooses, bring an action in any court of competent jurisdiction for
injunctive relief to enforce Employee's obligations under Section 7 of this
Agreement.
5
EXHIBIT A
EXHIBIT A - EMPLOYMENT AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the Effective Date.
INPUT/OUTPUT:
INPUT/OUTPUT, INC.
On its own behalf and on behalf of its subsidiary
and affiliated companies
By:
----------------------------------------------
NOTICE TO EMPLOYEE
BY SIGNING THIS DOCUMENT, YOU MAY BE GIVING UP IMPORTANT LEGAL RIGHTS. YOU ARE
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING AND RETURNING THIS DOCUMENT
TO INPUT/OUTPUT.
EMPLOYEE:
-------------------------------------------------
Date:
--------------------------------------------
6
EXHIBIT A